Tuesday, August 16, 2016

Show me the value

Whenever you get push back on pricing, like for example the response ‘I think that’s too expensive’, the incorrect assumption is that the problem lies with price. I appreciate that you are hearing there is an issue with price, but you know what? The real root of the problem lies elsewhere.

Whenever you receive push back about prices you charge for goods and/or services, what the potential buyer is really saying is that they don’t see the value of the item to them. In essence the price paid is more than the perceived value received. Thus, value is the real key and what should be the focus when it comes to sales rather than simply price.

So, whenever you hear the phrase ‘I think that is too expensive’ you need to shift your thinking from simply being about price to being about value. You need to appreciate that hearing that statement means you have failed to show enough value to the buyer. Thus, to win the sale you need to better show or enhance the value in the buyers mind.

If sales conversations were only about price then we’d be all buying the same thing at the lowest price. No, they key here is value to the individual buyer. Don’t believe me? Why do people buy really expensive clothes, watches, cars and so on? Without the concept of value then there would be no luxury goods now would there? Remember what I said about value? It is in the eye of the beholder. Some will pay a lot more for an item simply because it has that value in their mind.

Purchases are made emotionally. Sure, everyone pragmatically looks at costs and benefits but the actual point of sale, the actual point at which a decision is made to purchase is done emotionally once all the practical requirements have been met. Thus, sales are not purely pragmatic affairs. Emotion is involved with every purchase.

Let’s take Office 365 as an example here. I see lots and lots of Business Suites being sold to customers. Why? Typically because they are deemed the most ‘cost effective’ or ‘cheapest’. To me, that is simply an excuse for not showing the value of plans like E3 or E5.

Sure, E3 and E5 have a greater cost, but you know what? They also have a greater value which many businesses are more than willing to pay for. All that needs to happen is for them to be shown this value which is what I rarely see.

The Office 365 E5 Suite for example includes features like Cloud PBX, Lockbox, Legal Hold, eDiscovery, Advanced Analytics, Power BI Pro and more. I am yet to come across a business that doesn’t want to take advantage of at least one of these features. Unfortunately, most who sell Office 365 to customers aren’t aware of these features themselves and thus can never sell the true value of these offerings.

Once customers are aware of what plans like E5 can provide for their business their mindset shifts from focusing on price to value. They appreciate the benefits Office 365 services can provide. Many in fact see these advanced offerings as ‘cheap’ simply because the value now far outweighs the price.

That’s the shift you need to make. You need to focus on helping customers understand the value of your offering no matter what the dollar value. If you haven’t done that then you have failed to show enough value. It’s then time to go back, sharpen you pencil and build more value into your offering. Luckily for things like Office 365, the value is already there, all you need to do is reveal it and show how the services it contains adds value for the customer. If you do it right I’m pretty sure you’ll find most customers see the advanced Office 365 plans as ‘cheap’.

Thus, remember, if you ever hear the phrase ‘I think that’s too expensive’ then you’ve failed to show value. In most cases, this means you need to invest more time in learning about the product and the customer. That is the successful way to make sales, knowledge not price.